A question quite often arises, and that is if both spouse needs to join in the bankruptcy petition. The answer is big NO. There is no such obligation that both spouses should join bankruptcy. Only the needful spouse need to file, and the other can stay away. In fact, it is a good idea if one of the spouse does not join. Reason being she can save her credit and both spouse can be benefitted from it down the road in using their good credit again. However, the remaining spouse income need to be included in Mean Test.
Wife Does Not Need to Join Bankruptcy Even If she is on the Mortgage?
Bankruptcy laws allows only one spouse to file bankruptcy even if both spouses are on the deed and mortgage. This is true even if you are past due on your mortgage payments. If only one of you files a Chapter 13 bankruptcy, you will include the past due mortgage payments in the Chapter 13 plan to be paid by the Chapter 13 Trustee. As long as you continue to make the mortgage payments due after the bankruptcy is filed, no adverse action will be taken.
As you may be well aware, anytime a Chapter 13 bankruptcy is filed, an “automatic stay” is put in place. The automatic stay stops all action against you by creditors. Consistent with the filing of a Chapter 13 bankruptcy, an additional advantage is that it also creates a “co-debtor stay”, which prohibits creditors from going after one’s spouse for collection of the debt. One thing should be remembered that the wife’s income would become part of the means test. Again, in Nevada which is a community state, both husband and wife are responsible for each other’s debts especially, if they were accumulated after the marriage. However, the identifiable separate debts are only payable by the concerned spouse if they were incurred prior to the marriage.